Fearing cannibalization, beer companies ask Canada for higher cannabis taxes

Canada’s beer business is expressing concern that the leisure marijuana market goes to chop into its income, and it needs the federal government to boost the proposed tax to degree the enjoying area.

“The potential for legal marijuana to cannibalize beer (in Canada) is much more significant compared to the U.S. because of our higher beer taxes and high prices,” Luke Harford, president of Beer Canada, advised the Standing Committee on Finance over Bill C-74.

His statements give a uncommon glimpse into the nervousness the alcohol business has concerning the pending legalization of marijuana.

Beer Canada, a commerce group, represents 50 beer makers.

Part of Bill C-74 lays out the excise taxes for leisure marijuana gross sales.

Harford urged the committee to advocate a higher degree of taxation for adult-use cannabis gross sales earlier than the regulation goes again to parliament for a 3rd and remaining vote.

“Domestic brewers are concerned that legal recreational marijuana is going to have a negative impact on beer sales, which on a per-capita basis have already declined by 10% in the last 10 years,” he advised the committee.

“The implication is clear. Low cannabis taxes will increase cannabis sales, while high beer taxes will decrease beer sales.”

Industry insiders say the priority over “market cannibalization” might immediate extra alcohol companies to make forays into cannabis or marijuana companies to start out shopping for liquor producers.

In October, New York-based Constellation Brands – which owns, distributes and markets 100 beer, wine and spirits manufacturers, together with Corona and Robert Mondavi – acquired 9.9% of Smiths Falls, Ontario-based Canopy Growth for 245 million Canadian dollars ($190 million).

In a current interview with Marijuana Business Daily, Sundial Growers CEO Torsten Kuenzlen – former government for The Coca-Cola Co. and Molson Coors – stated “virtually all alcohol companies are very carefully looking at the cannabis space and looking to partner in some shape or form.”

Matt Lamers may be reached at [email protected]

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